The development of distinct cell lineages from unspecified precursors is the result of complex interactions between cell-extrinsic cues and the crucial programs of gene expression. To study such interactions, we are focusing on the development of neural crest-derived and optic neuroepithelium-derived pigment cells. This choice is based on the facts that pigment cells are critical for the development and function of the inner ear and eye, can easily be visualized in vivo and manipulated in culture, and are disturbed in their development by a number of discrete mutations, allowing us to analyze the underlying developmental mechanisms. In particular, we focus on the post-translational regulation of the crucial pigment cell transcription factor Mitf by extracellular signaling. MAP kinase signaling, for instance, has been shown to lead to serine phosphorylation which influences the activity and stability of the protein, and we are characterizing a series of other modifications of MITF that may also influence its activity. The phenotypes of extant Mitf mutations, mostly in the mouse, are consistent with the notion that these modifications are biologically relevant, but only one mutation, in man, has been described that specifically affects a modifiable residue. We, therefore, have initiated a program to systematically mutate the codons for specific residues by targeted mutagenesis in mice and to analyze the effects of these mutations on the control of pigment cell proliferation, migration, and differentiation. In a parallel approach we test how different signaling pathways are integrated during lineage development. For instance, using a combination of genetic models and in vitro tissue recombination methods, we recently found that the well-known dual dependency of neural crest-derived pigment cells on G-coupled and tyrosine kinase receptor signaling results from complex interplays between cell-autonomous and cell-non-autonomous actions of the respective receptors. Taken together, these approaches will help us to understand how extracellular signaling is coupled with transcriptional regulation during development of two model lineages which are both instrumental for mammalian sensory organ development and function.